On March 27, 2024, the CFPB issued a circular warning remittance transfer providers that false advertising about the cost or speed of sending a remittance transfer can violate federal law. The circular highlights several marketing practices relating to sending international money transfers that may violate the Consumer Financial Protection Act’s (CFPA) prohibition on deceptive acts or practices.
The CFPB’s circular addresses the practices by remittance providers, including digital wallet providers that offer remittance services, that the CFPB has observed and that consumers have complained about. These practices include:
Falsely marketing “no fee” or “free” services. Providers might deceptively market remittance transfers as "no fee" or "free" when they’re actually charging consumers fees. Marketing transfers as "free" for digital wallets can be deceptive if costs are imposed for currency conversion or fund withdrawal. International money transfers advertised as "free" may actually incur costs through exchange rate spreads.
Burying promotional conditions in fine print. Providers can violate the law by advertising special prices for money transfers without clearly stating that the deal is limited or temporary, even if this information is in small print or mentioned later during the transaction.
Deceptively advertising how long transfers will take. Remittance transfer providers may violate the CFPA’s prohibition on deceptive acts or practices by marketing remittance transfers as being delivered within a certain time frame, when transfers may actually take longer to reach recipients.
Read the CFPB’s news release here.
The full circular can be found here.